Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/airports-of-thailand-pcl" target="_blank" data-smartkarma-citation="entities:239:1" rel="noopener">Airports of Thailand (AOT TB)</a> path to recovery is quite clear - vaccine, borders reopening, and shorter or abolishment of the quarantine requirement. The first two are in the works with countries around the world racing against each other for a higher and faster vaccination. Shorten or abolishment of quarantine requirement may be difficult, even for those who are already fully vaccinated, until the next quarter at least. The Phuket reopening sandbox will be a proof of concept of whether 1) Thailand's health infrastructure is ready to accept foreign tourists and 2) people are ready to travel again once vaccinated.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/212/121/original/image_17443488521623225592751.png?1623225593" class="editor-image img-responsive" data-smartkarma-image-id="212121"></figure>
source: Reuters

Airports of Thailand (AOT TB) path to recovery is quite clear - vaccine, borders reopening, and shorter or abolishment of the quarantine requirement. The first two are in the works with countries around the world racing against each other for a higher and faster vaccination. Shorten or abolishment of quarantine requirement may be difficult, even for those who are already fully vaccinated, until the next quarter at least. The Phuket reopening sandbox will be a proof of concept of whether 1) Thailand's health infrastructure is ready to accept foreign tourists and 2) people are ready to travel again once vaccinated.

source: Reuters

Airport of Thailand (AOT): Phuket Sandbox

<a href="https://www.smartkarma.com/entities/samsonite-international-sa" target="_blank" data-smartkarma-citation="entities:12790:1" rel="noopener">Samsonite (1910 HK)</a> 's share price has enjoyed a handsome recovery in the past year and the gutsy bottom picker traders have made around 136% since May 2020. Has the recovery trade been priced in? If not, how much upside is left? Or it is all just a euphoria? 
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A channel check with flight processing software companies reveals that the recovery in the number of air travel passengers is real. There is of course a risk that there will be delayed recovery due to the emergence of the new variant or slower-than-expected vaccination exercise in the major part of the world.
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Apart from that, <a href="https://www.smartkarma.com/entities/samsonite-international-sa" target="_blank" data-smartkarma-citation="entities:12790:1" rel="noopener">Samsonite (1910 HK)</a> looks like a buy to me especially when it has a decent amount of cash on the balance sheet.

Samsonite (1910 HK) 's share price has enjoyed a handsome recovery in the past year and the gutsy bottom picker traders have made around 136% since May 2020. Has the recovery trade been priced in? If not, how much upside is left? Or it is all just a euphoria? 

A channel check with flight processing software companies reveals that the recovery in the number of air travel passengers is real. There is of course a risk that there will be delayed recovery due to the emergence of the new variant or slower-than-expected vaccination exercise in the major part of the world.

Apart from that, Samsonite (1910 HK) looks like a buy to me especially when it has a decent amount of cash on the balance sheet. 

Samsonite (1910): Channel Checks Recovery

A closer look at each of the Air Travel Pass requirements reveals that the residents from the above countries are not required to do Stay Home Notice/quarantine for 14 days anymore. Historically, tourists from China are the biggest constituents of the total number of tourists in Singapore. The fact that China has already been included in the Travel Bubble is good news for ComfortDelgro as there will be more ridership in Singapore's taxi and public transport. 
Launch of lifestyle app (Zig), functionality improvement such as adding more destination in a single journey, increasing its online presence through Lazada is some of the initiatives that ComfortDelgro's management has initiated in a bid to win more market share in the taxi business. This will result in both an increase in revenue and a blended margin.

A closer look at each of the Air Travel Pass requirements reveals that the residents from the above countries are not required to do Stay Home Notice/quarantine for 14 days anymore. Historically, tourists from China are the biggest constituents of the total number of tourists in Singapore. The fact that China has already been included in the Travel Bubble is good news for ComfortDelgro as there will be more ridership in Singapore's taxi and public transport. 
Launch of lifestyle app (Zig), functionality improvement such as adding more destination in a single journey, increasing its online presence through Lazada is some of the initiatives that ComfortDelgro's management has initiated in a bid to win more market share in the taxi business. This will result in both an increase in revenue and a blended margin. 

High Conviction Ideas 2021 Update: Travel Bubble, Taxi

One of the many reasons why drivers were lured to join <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> and <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> is that the app provides content that leads to a higher daily order. Grab went on to become a super App, offering a wide range of services from transport, food delivery to finance including insurance. <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a> , a listed peer for <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> and <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> is currently trading at 8.69x PBR, 500% higher than <a href="https://www.smartkarma.com/entities/comfortdelgro-corp-ltd" target="_blank" data-smartkarma-citation="entities:497:1" rel="noopener">Comfortdelgro Corp (CD SP)</a> at 1.5x PBR. The taxi business contribution to the group's revenue has been reduced to 13-14% to the group's revenue due to the stiff competition from Grab and Gojek as well as from the pandemic.Long being dubbed as the proxy to  Singapore's tourism and residents' transport provider stock, the foray into the EV charging station and Smart and Intelligent Mobility Technologies could shift the market's opinion to Autonomous and Electric Vehicle and the stock may trade at a higher multiple.

One of the many reasons why drivers were lured to join Grab (0967655D SP) and Gojek (1379371D IJ) is that the app provides content that leads to a higher daily order. Grab went on to become a super App, offering a wide range of services from transport, food delivery to finance including insurance. Uber (UBER US) , a listed peer for Grab (0967655D SP) and Gojek (1379371D IJ) is currently trading at 8.69x PBR, 500% higher than Comfortdelgro Corp (CD SP) at 1.5x PBR. The taxi business contribution to the group's revenue has been reduced to 13-14% to the group's revenue due to the stiff competition from Grab and Gojek as well as from the pandemic.Long being dubbed as the proxy to  Singapore's tourism and residents' transport provider stock, the foray into the EV charging station and Smart and Intelligent Mobility Technologies could shift the market's opinion to Autonomous and Electric Vehicle and the stock may trade at a higher multiple. 

Comfort Delgro (CD): Zig and EV Charging Station

Contrary to last year when foreign tourists entering Thailand must be quarantined for at least 14 days, the quarantine requirements will be waived for vaccinated foreign visitors arriving on the resort island of Phuket from July 1, the first destination to reopen since the Covid-19 pandemic. The plan to re-open Phuket for tourism was supported by local business operators that joined forces and offered to be the reopening model for major tourist provinces. Flights to the province and hotels to attract quality tourists will be made available.<div class="content-highlight">The stock is currently trading at the premium to its 5-year average in the three valuation metrics especially in the PER and EV/EBITDA where earnings and cash flow (EBITDA) were particularly low in 2020 due to the poor tourists' arrival in Thailand. However, the current PBR premium to the 5-year average is not that much, suggesting that the <a href="https://www.smartkarma.com/entities/airports-of-thailand-pcl" target="_blank" data-smartkarma-citation="entities:239:1" rel="noopener">Airports of Thailand (AOT TB)</a> is not exactly overvalued compared to its 5-year average.   </div>

Contrary to last year when foreign tourists entering Thailand must be quarantined for at least 14 days, the quarantine requirements will be waived for vaccinated foreign visitors arriving on the resort island of Phuket from July 1, the first destination to reopen since the Covid-19 pandemic. The plan to re-open Phuket for tourism was supported by local business operators that joined forces and offered to be the reopening model for major tourist provinces. Flights to the province and hotels to attract quality tourists will be made available.The stock is currently trading at the premium to its 5-year average in the three valuation metrics especially in the PER and EV/EBITDA where earnings and cash flow (EBITDA) were particularly low in 2020 due to the poor tourists' arrival in Thailand. However, the current PBR premium to the 5-year average is not that much, suggesting that the Airports of Thailand (AOT TB) is not exactly overvalued compared to its 5-year average.   

Airport of Thailand (AOT): Tourists, Come Back.

Singapore

SATS Limited provides integrated ground handling and in-flight catering services at Singapore Changi Airport.  The Company also provides aviation security, airline laundry, and airport cargo delivery management services.

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SATS (SATS SP)

Airport of Thailand (AOT): Phuket Sandbox

The Phuket reopening sandbox will be a proof of concept of whether 1) Thailand's health infrastructure is ready to accept foreign tourists and 2)...

Henry Soediarko

Samsonite (1910): Channel Checks Recovery

Air travelers has started to recover implying that Samsonite's business recovery story is solid while the management has also coped efficiently...

Henry Soediarko

High Conviction Ideas 2021 Update: Travel Bubble, Taxi

Zig, adding more destinations in a single journey, cooperation with Lazada are some initiatives that ComfortDelgro's management has initiated in a...

Henry Soediarko

Comfort Delgro (CD): Zig and EV Charging Station

Dubbed as the proxy to Singapore's tourism and residents' transport provider stock, the foray into the EV charging station and Smart and...

Henry Soediarko

Airport of Thailand (AOT): Tourists, Come Back.

The quarantine requirements will be waived for vaccinated foreign visitors arriving on the resort island of Phuket from July 1, the first...

Henry Soediarko

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